With this strategic inflection point, the era of post-BillG Microsoft 2.0 has begun.

(Sip. Savor. Yum.)

The only not-so-good thing out of not blowing all of our cash at once is that we'll continue to live in an era of cash-cow abundance, preventing us from making profit-minded decisions. The lack of the money cushion would have, I presume, actually caused new projects to expect to bring in cash vs. becoming strategic money pits.

Out of this had best come a new reorganization of our online properties. Out with the old already. We had reached a bet-the-company point in going after Yahoo! to make up for the lack of performance out of MSN / Search / AdCenter in an attempt to leap-frog forward. I think we need to hang-up on the good-enough consensus culture for a while and put in a strategy czar to get things done vs. expecting something to arise out of the dysfunctional ecosystem we currently have.

And speaking of Microsoft 2.0: Ms. Mary Jo Foley's book is out now. Once you get past the foreword, it's a good read. I hope she comes to campus - well, Redmond probably - soon so that folks can have a discussion of the book and ponder the future in a face-to-face forum.

Soon, we can get back to the usual program of talking about the recent Town Hall and looping back to cover the recent comments about Microsoft India. For now, I'm going to ease back and enjoy this strange feeling I have: being happy regarding a wise decision our leadership finally came around to.

350 comments:

It's a great day to be a Microsoftie....I've never been so happy that a deal didn't go through....time to go out and kick some Yahoo! And more importantly....time to go and steal away some of their engineering talent for far less than $44 Billion!

Mini, my hats off to you.

I'm going to sit back and savor this moment...

Now may be the time we look back and see this as Balmer's blunder and soon to be exit from the company.....

I know that everyone on Wall Street (whos clear incentive is to get deals *done*) will start to say how weak this shows Ballmer to be. I think this is looking at it all wrong.

I'm no huge fan of the guy in many cases but I have to say that I'm impressed here. Walking away shows *real* conviction and strength. It would have been so easy to just say 35 or 37 and be done -- walking away is infinitely harder.

I could quibble with the fact that this saga happened at all but given the outcome I'm so happy I'm willing to ignore that.

I never thought I'd say this, but thanks, Steve. Foreseeing something like this, I bought quite a bit of Microsoft stock over the last few weeks, and you made me a few thousand dollars by just throwing in the towel.

Hearty congratulations to Mini and all 'softies for dodging this bullet -- and hearty wishes that this may lead on to even better things, such as Ballmer deciding to spend more time with his family, reorganization of (or even, dare one hope, FULL EXIT FROM!) the hopelessly money-losing online business lines (and -- dreams, dreams!!! -- maybe even the OTHER ones, such as Zunes ad games?!), new focus on the GOOD parts (desktop, office, servers and tools, ...)...

At the very least, this is the kind of news that might draw me back into the stock (though I expect such a hearty bump come Monday that I may not in fact get a good buy opportunity!-).

I actually have mixed feelings here. The idea of acquiring Yahoo! was a bad idea from the beginning, so I feel so relieved that the deal did not go through. I also appreciate the management team’s ego busting decision to walk away from the deal.But… What kills me is how hated Microsoft really is. An icon like Yahoo! willing to commit corporate suicide (by outsourcing to Google) just not to fall in our evil hands is just too much. I think it is time to fix our image, isn’t it?

HAPPY HAPPY DAY TO BE A MICROSOFTIE! Big thanks to SteveB and the board for realizing that walking away was the best decision for us. The initial bid was WAY TOO GENEROUS and many of us can't believe you went even higher to $33(if that rumor is true), but sanity finally set it in.

Thank you Steve. We've all put down our pitch forks and torches. They'll be pleny of happy drinking for softies everywhere tonight!!!

And now, I'd like to humbly submit Jerry Yang and the Yahoo board as the biggest buffoons ever. Yahoo turned down over $45 BILLION dollars.

$45 BILLION DOLLARS.

Could they BE any more stupid? If I was a Yahoo shareholder, I would be livid out of my mind. This will haunt Yahoo because now Yang and company have to prove that whatever the hell business strategy they have is worth more than $45 BILLION dollars.

I'm struggling to come up with any other example of such profound greed, ego and incompetence.

I hate to burst you softies' bubble, but the move by Balmer was probably just a strategic one to drive Yahoo stock back to it's pre-offer level, thereby instilling a stockholder revolt, similar to the successful Oracle-BEA takeover bid last year.

But I think Yahoo will weather this one, even with a stock value drop next week.

This news just made my day as well and even though I might not have cracked open a bottle of wine to celebrate I did give a a couple Yahoo's. I have written more then a few times on how this would have been the worst thing that could have happened to Microsoft.

Now if we can just get Ballmer to take a permanent vacation somewhere in the middle of the Pacific on an island without any internet access.

>This will haunt Yahoo because now Yang and company have to prove that whatever the hell business strategy they have is worth more than $45 BILLION dollars.

And Microsoft is worth $279 billion? Oh yeah, I'm going to go there.

Yahoo stock was selling at $300 around 2003 before Google became the big man on campus. There may be a stockholder revolt if Microsoft spins up the phony press, but I doubt it. Nice try.

To those softies who think that some of us on this blog are about hate, you need to think twice. Why on Earth would anyone spend any time whatsoever here if there was not some genuine concern and care going on, negative or not? You are going to see a lot of top executive at Microsoft scrambling to justify this game and save their jobs over the next few months.

My wife showed this news to me on MSN homepage (yep we believe in dogfooding :) ) before Steve sent out the email and I was like "Are you kidding me?".This definitely compensated for the gloomy day on first hearing the news to acquire Yahoo! I know this might be shortlived when deal strikes again but enjoy while it lasts!!!

Wait Wait Wait!! You guys are HAPPY? You're happy that you have to now face GOOGLE ... ALONE?? Okay, Microsoft, come on, let's see if you have it left in you to actually COMPETE and win. I, for one, know you can do it because I saw you do it in the 90s. I just hope you can still do it this time. You guys need to band together, suck it up, stop complaining about all the crap you hate, and learn to love your company again, and take back the crown in online from Google. So, if you're happy you now have $45B in the bank, you better be equally charged up about using it to fuel innovation and just plain great products so you can win in the market.

I'm rootin' for you, I know you can do. And the world is rootin' for you too.

We've seen this production before (Larry Ellison special). This is end of Act I. Act III begins with M$FT coming back to the table in a few quarters.

Act II is about the bet that the YHOO board is making on Jerry--to see if he can demonstrate whether there's a lot of unlocked value in Y! It won't be made easier b/c there will likely be more lawsuits filed, etc. It sure feels like someone with a lot more creativity (and recall) can spin a yarn on this using the plotlines of Macbeth?

What's for certain is that M$FT still needs Y! to have a chance at being a relevant player in the online world for the long-run.

DITTO on the comment about Scoble. What a has-been. Can we get him to stop contributing his hot gas to global warming?? Scoble, get a life, dude. You were better when you were at Microsoft. Go back to writing glowing articles about Google--that should get you some traffic until they fall out of favor--oh wait, that already happened!

I do see this as a play by Steve. Notice how he pointed out the value left on the table. And called out the poison pill provisions Jerry threatened. And closed the letter mentioning the shareholders.

I would not be surprised, if this is not the last we hear of MicroHoo. But for now, at least, we can exclaim Woo Hoo that the company avoided an even worse decision (buying at the premium requested by Yang) than the decision to make the initial offer.

I _love_ Vista, honestly. I use it and I love it. I don't even work for MSFT. It's stable, secure, looks gorgeous on my new LCD, and includes some cool new features (photo gallery) that were not on XP. So, it's not a revolution, so what? It's a good step forward. Maybe it's really just XP 'Version 2' but whatever. Stop whining about it, it's getting old.

I think Vista should have been more aggressive in integrating search, and that might have helped show a path to winning in search and not require a drastic move like buying YHOO. Just a thought...

To those softies who think that some of us on this blog are about hate, you need to think twice. Why on Earth would anyone spend any time whatsoever here if there was not some genuine concern and care going on, negative or not?

Um, yeah... It is actually. We know what hate looks like bud. I've actually been aggressively confronted on SOCIAL CIRCLES by lunatics looking to "debate" when they hear I work for MSFT.

Why would they be here? Because they need psychological help. Why does any crazed, ideological, zealot spend SO much time fixating on "the bad guy"?

Why do right wingers troll Huffington Post and left wingers troll Michelle Malkins blog? Because people who have really, irrationally, extreme biases are crazy.

Don't think for ONE SECOND that ideology didnt have EVERYTHING to do with Yang's behavior. I know for as close to a fact as you can that Yang would have taken ANY other suitor over the hated MSFT.

Now of course a lot of this is the fault of MSFT for having the worst image management in history (I mean EXXON gets more love than MSFT), and some of it is due to Bill's aggressive monopoly building early on (although most today dont even really know the history in detail once you challenge them on it)

Really, MSFT is just the embodiment of what amounts to a social change fueled wave of anti-establishment sentiment.

The internet gives everyone a broad voice and if you yell long enough and loud enough, even people who arent that interested start to hear it. Add on a couple of bad public image moves and a flawed product, and couple it with strong competitors with solid products who are GREAT at image management (Google/Apple), and you have a real threat.

Image management has to be job #1 for MSFT at this point because even a great product will just get shouted down if the conversation isnt changed in the current environment.

On Yahoo, I suspect this is may be a strategic move, but until proven otherwise, Im just going to pretend its not. Sometimes a little fantasy is good for the soul.

Hey, if you don't want to see what other people (not me, by the way, that's not how FriendFeed works) are seeing Microsoft's moves, then so be it. Don't be surprised when you get more isolated and even more diseased with Redmonditis.

Scoble! You're insulting this blog by suggesting we don't know what FriendFeed is? Dude! I think you need a good ol' Seattle coffee break maybe laced with an ass whippin'. Come on, man, we know what Friend Feed is. Don't skirt the issue -- the feedback is that you're a has-been and you're just trying to prop up your page views any way you can. That's what people objected to.

What in name of Billg does a faltering Yahoo! have that is worth $45b to MS?

This is great for MS, now let's invest in our OS, and make it fast with an elegant UI. Let' invest in our APIs and tools to make it easier to create apps. Let' make the driver model easy to write code for. Let's beat JAVA with better language, libraries and tools. Speed up the CLR, vectorize, etc.

We need to move away from the add feature mentality of Vista and really innovate our OS/kernel and what can be done with it. Windows and Server can go so much further. We should take this opportunity to really reset and get some management focused on the right things.

OP here. I don't work at Microsoft, but I am aware that it must be a real issue to be the target of the wrath of a public that has long since grown weary of feeding the cash cow.

Believe it or not, I agree with most of your statements, but would say that brand is a result of doing everything else correctly. You can't buy brand value, you have to build it--earn it from your customers--it is a gift from customers who appreciate your services and products.

It is kind of a difficult problem. Do you have faith in your customers first and watch the dollars come in based on what Adam Smith felt about the best solution to the responsibility to your stockholders? Or do you milk the cow (screw your customers) in lieu of a failed argument that is what is best for the stockholders?

Is the vision something that involves working for your customers on an individual basis of improving their lives through the quality of your products and services or is the vision something that involves developing schemes of succeeding--at any cost?

In Microsoft's markets, it is a difficult task because a corporate customer's needs are never exactly the same as an individual customer's needs and your business has traditionally ignored the individual customer's needs in favor of the one with the money to pay.

I don't think your management really gets it about the way the world expects so much more than what you have offered in the past. I don't think they really understand the change. They know things have changed and they talk about it, but the decisions down the line are out of tune with your customer's expectations.

Which is it for Microsoft, ends to justify the means or means to justify the ends?

but would say that brand is a result of doing everything else correctly. You can't buy brand value, you have to build it--earn it from your customers--it is a gift from customers who appreciate your services and products

Going to respectfully disagree. Apple and Google are proof. Google can step all over privacy rights, act agressively, and monopolize internet monetization and it doesnt register on people.

Apple can have "battery gate" after "display gate" and it doesnt even nick their momentum.

The reality of human nature is that perception is reality. It's why good looking people have such an easy time, at a very fundamental level.

An ugly guy can be the nicest guy in the world and bend over backwards for people and get kicked in the head.

MSFT is the ugly guy. Bill has negative charisma. Jobbs is a charisma machine. Google is the hero of the ABM movement.

An argument could easily be made (and IS often made by neutral parties) that MSFT has MANY *great* highpoints.

Those arguments get shouted down and the folks that made them accused of being "shills". Its a mob mentality.

When a FORTUNE MAGAZINE columnist gets lambasted for daring to suggest that MSFT probably isnt nearly out of business because there ARE some good products, you know you've reached insanity critical mass.

Yes MSFT has behaved badly in the past. Yes there have been some missteps. But the impact of all of it is magnified 1000x because of image.

"Create great products and you'll be fine!" is a nice utopian ideal, but it doesnt map to reality.

My point is that there ARE some great products rolling out, but they are ignored entirely because the hate machine is strong.

Human nature simply is what it is. Jobs pulled Apple out of the grave by being charismatic more than anything else. They do four things VERY well... 1) build UIs 2) industrial design 3) create ecosystems and 4) manage image

Jobs himself will tell you that without 4, the rest is an uphill battle.

>My point is that there ARE some great products rolling out, but they are ignored entirely because the hate machine is strong.

Just a couple of cheviots from op here: I was just reading a quote NY Times article about the Microhoo failure: "Christopher P. Liddell, Microsoft’s chief financial officer and an architect of its Yahoo offer, has told The Times that he’s willing to play hardball. “You have to be disciplined and ruthless,” he said. "

Microsoft has been at being a poorly managed company for a very long time. The others will catch up soon enough. What goes around comes around.

Your Apple analogy is a little off too in that Apple will never have Microsoft's position because it sells a bound hardware-software system, and Jobs long ago decided what was important to Apple and what was not. The focus is on the high end product offerings while Microsoft seeks a much broader distribution of product.

All you have to do is restore the honor in that. Bring it back to the individual level. Make us smile. The simplest thing is always the hardest to do.

Once again Ballmer showed that we are lukcy to have him as our CEO. MSFTexterememakeover, I hope you are reading this comment here. On your own blog you filter out all the comments and analysis going against your own. If you had smarts you would be in a position of power. You are in a position of ranting beyond any basic knowledge of numbers.

Great, we didn't buy Yahoo, but that doesn't help our online story any. Having worked there for a few years, MSN is still loaded with incompetent PMs and developers and STEs masquerading as SDETs with a long history of failures that are busily pushing to the next generation of online failures.

Your Apple analogy is a little off too in that Apple will never have Microsoft's position because it sells a bound hardware-software system

Agree TOTALLY on MSFT mis-management. You wont get ANY arguments here on that one!

Disagree TOTALLY on Apple. Jobs is a megalomaniac of the highest order, but he is also a GENIUS and a brilliant strategist that really never loses (plus he has charisma, so when he's as asshole, people LOVE him more)

He has reinvented Apple time and time again.

The integrated stack is their power. He either had great luck or great forsight in allowing Bill to create the PC industry (which took big diversity, an ecosystem and tons of partners) while he stayed monolithic and waited for it all to become a commodity.

Once its a commodity, people just want the "one that works and looks pretty" and "rule of the geek" is over. Thats now and BAM enter Jobs. Thus Apple market share climbs and he hasnt really done much at all except stick with the formula and make two GREAT moves:

1) leverage his work at NeXT to flush legacy MacOS thus getting BIG reward for MINIMAL investment since most of the work was done and MacOS was a dinosaur

2) switch to Intel thus gaining parts parity with the PC and opening the door for shit like bootcamp

While that was cooking he essentially took total ownership of portable audio (embarassing Sony, MSFT, Amazon, and all of the MP3 player industry) and then entered the phone business, turned the model UPSIDE down (something MSFT has INSISTED cant happen) and beaten the hell out of Win Mobile.

All of these moves required BIG balls and ruthlessness. Without going into a lot of detail, I am privy to some behind the scenes iPhone chatter pre-ATT deal and it was PURE hardball "YOU NEED US DINOSAUR!" type talk to all of the big names you can imagine.

And what happened? He was right and he won. Does anyone talk about or care about his hardball with other CEOs? NO! why would they?! Why SHOULD they???

ONLY MSFT gets ideological analysis. Thats the core of my point.

The current generation is lost, to be honest. My interest lies in fixing this LONG term which is why I am VERY bullish on XBox (an unpopular topic here, but the folks here are wrong on this)

I donate time to inner city schools and talk to kids. Kids that dont know WHAT MSFT is LOVE XBox. Kids that think Apple IS the only computer, LIVE on XBox Live.

XBox is our ONE remaining brand brightspot for the next generation. We have a narrow window to capitalize on it and fix things.

Anyone who thinks this sounds "ruthless" or "shallow" just really doesnt understand the realities of business well.

You will have ups and downs with products, but long term, your brand power will keep you alive. Without it, the greatest product in the world wont sell at all. History is litered with examples.

>>popping in briefly to encourage folks to steer away from the Scoble criticizing. Uncool.

You got to be kidding ... this is the same Scoble who "almost wrote a very long blog post telling Microsoft how it could get back into the search business" ... yah ... what Microsoft really needs is more Scobles to help it win in search ... if only he had time in between his trolling for traffic to his ad-infested blog.

Me thinks you value the Scoble-Mini cross linking a little too much Mini.

I am so glad Steve walked away. As a long time MSFT acid mine worker who watched options evaporate and stock awards go nowhere it pleases me to see that Steve didn't get target fixation.

Now, just maybe, all of our "incentive for future performance" will actually reflect the level of effort we exert as employees.

If only we could get folks in the middle to actually held accountable. I'm still seeing buckets of money thrown at people who don't produce just because they've made it to the magic cash level where accountability seems to be optional.

Mini, I'm getting tired of all your negativity and lack of perspective on the big picture. What do you suggest Ballmer can do that would significantly move the needle on msft's stock price?

Google is a massive massive threat to many of msft's businesses, and more importantly is the only new tech business to emerge in the past decade that has the scale to move the needle on msft's stock price. Nobody has managed to put a dent into Google, and throwing more engineering effort at the problem is just a developer's misguided understanding of business in general.

Ballmer and his team must be smart enough to know how much of the search advertising business we can get with a yhoo acquisition, and must know that it has a good chance of paying off at our offer price. Just because it's a big number doesn't mean we have to freak out.

What ideas do you have to improve msft's stock price? Or do you just like to complain?

>> What do you suggest Ballmer can do that would >> significantly move the needle on msft's >> stock price

Prune middle and upper management ranks. Mandate that all folks in management positions have a minimum of 10 reports. Abolish program management as a discipline - engineers can talk to each other without PMs' help. Institute and encourage 20% time policy. Go on a quest against red tape, visibility management, and process for the sake of process.

My questions remain:1. Is online ad business really that critical for this company? Couldn't we find some new "next big thing" and be #1 instead of fighting for an "already big thing" where we are a distant #3?2. If it is so important, how do we fix our online business?3. As someone who works outside of online team, I have to say I feel abandonded. Today all attention has been given to online business, most resources are allocated there. If we are willing to pay Y! $45B, persumably we are willing to pour that money to Windows Live team while the company is cutting spending everywhere else. Should everyone just move to online team? Will we have another $45B to spend if we give up our "old businesses" but still could not win the web?

I was YHOO investor and sold all at 28.xx. Enough gain for me from 18.xx. Now those suckers that hold YHOO will have fun ride on Monday. It will go down to say $23 on Monday, then will go towards $20 by end of the week.

Now about fixing MSFT. I am an ex-MSFT. There are many problems in the company, some easy to fix, some very hard:

1. Trim down management - each lead/manager must at least have 5 reports. This will make things more managable and flatter.

2. Buy some stakes in online verticals. 4-5 of them should be as good as YHOO.

Steve Balmer is a genious! I love it. Thankfully Yahoo! was greedy. Microsoft is going to take that $44B and ROCK THE WORLD!!! Of course Microsoft needs to shed some of the indecisive and politicing middle managers and get down to some serious business? Can anyone say "Neutron Jack" (Ala Jack Welsh)?

"..new focus on the GOOD parts (desktop, office, servers and tools,.."

How about *compilers*?

Yeah! Just think if Microsoft had stayed in _that_ business and never expanded into operating systems. There are plenty of *free* compliers now and Microsoft's business would have been completely commoditized by now. In other words, by this point in time Richard Stallman would have made Microsoft's business model irrelevant.

The fact is, Vista has shown computer users that operating systems don't have to be exciting to be *useful*. Microsoft has been adding features and improving the design of their operating systems until _new_ doesn't drive sales like it used to; people are getting used to the idea of "good enough".

And now that they have reached that stage in their collective development, they will begin to look at alternatives. The alternatives don't necessarily have to have every feature of Microsoft's offering. They just have to work as good as Windows 98, Windows 2000 or Windows XP. Since Microsoft has decided to abandon their XP customers, they are giving the competing operating systems an opening.

Conceding territory is how IBM lost its business in the late 80s. Microsoft concedes users at their own peril.

The Boy Fuhrer from Duncan Hines will live to do something even dumber than this, you can be sure. CNET hilariously reported that the Monkeyboy finally figured out that a friendly integration of Yahoo! was unlikely. There are few companies in the Valley that hold MSFT in lower esteem than YHOO. Had the Boy Fuhrer from Duncan Hines pulled this off, he would have been left with a Intifada to mismanage. Darn, that would have been entertaining.

Now would be a GREAT time to focus on compilers. I don't know if you've noticed, but next year people will routinely run 8 core machines on their desktops, and compilers/libraries that could transparently and efficiently use that hardware are nowhere to be found.

Focusing on compilers is hard, though, because there's a lot of theoretical stuff to understand, and not all of it will work in the end. And, needless to say, engineers/researchers capable to go beyond the state of the art are scarce.

Why we can't sell gooddamn ads online - that's beyond me, though. We have all the technology and more than enough brains to get this off the ground. It's just so damn hard to get anything done around here, because everyone is busy playing the game.

SteveB was a dumb ass for making an offer in the first place. Yahoo and Filo have however proven to be even bigger morons by turning MS down. The only thing I now need to make my day even better is a mail from SteveB saying "after many years, Kevin and I have decided we needed to spend more time with our families....."

Speaking as an MSN insider (*not* Windows Live), things would be a lot rosier there from both a morale and productivity / revenue standpoint if we didn't get massively re-orged every 18-24 months. It takes at least 6 months for all the org crap to be sorted out and another 6 to get the MSN 'ship' pointed in the direction the new management wants to go (every new VP has an agenda / new world order they want to establish), so it is no wonder that MSN seems as if it is wallowing in indecisiveness. The whole Yahoo issue was just more FUD to really shitcan morale.

Yet despite this, MSN as an entity continues to be in the black. Harness them to Windows Live and call it OSG and it's a different story, of course...

Yuk, don't say such things. Don't you remeber the last massive multi-billion $ investment in Windows Live? Caused quite a hit on the stock the day it was announced.

You can see the results for yourself. Every single penny was wasted.

Had almost forgotten about that. So in the last few years Microsoft management has- wasted those billions on Live- wasted another billion or so on xbox repairs- let nintendo get ahead- let bungee split- come up with an embarrassing zune 1.0 response to ipod- lost to google- lost top talent to google- lost to iphone / ipod touch- paid 6B for aquantive whose revenue has declined since (botched integraton?)- released half baked vista that's giving people a reason to try out macs, got themselves a class-action lawsuit- missed virtualization opportunities- numerous fines slapped by EU- almost threw away 45B- dropped in brand value

"So, if you're happy you now have $45B in the bank, you better be equally charged up about using it to fuel innovation and just plain great products so you can win in the market. I'm rootin' for you, I know you can do. And the world is rootin' for you too."

Anyone who's working on Windows 7 (myself included) knows that with the right management in place Microsoft can do amazing things. Just wait until Windows 7 comes out -- note that the leaks that have been on the 'net haven't even shown a fraction of what's there. I'd love to say more, but I value my job too much :-)

"Anyone who's working on Windows 7 (myself included) knows that with the right management in place Microsoft can do amazing things. Just wait until Windows 7 comes out -- note that the leaks that have been on the 'net haven't even shown a fraction of what's there. I'd love to say more, but I value my job too much :-)"

If I was your boss and discovered who you were, I would fire you in 5 seconds for saying this crap. Back in the day, Vista was pretty amazing in theory and then it was totally gutted and what actually went to market was, as we know, a pile of shit.

The very last thing Win7 needs is your well-intentioned but seriously stupid hype -- it needs to be released to consumer acclaim. You need to keep your dumb yap shut and let the people speak when it's in the market.

We will have a second bite at the apple. YHOO will tank, the shareholders will file suits, and then Ballmer will be back with a lowball offer that will be accepted with open hands and clicking heels. I've spoken to some of my buddies who are super senior at Yahoo (Decker direct or Decker minus 2) and they were all hoping the deal would happen so they could bail out and get a tan in the Bahamas.MS should never have bid for Yahoo in the first place.

As far as Microsoft India is concerned - once upon a time -maybe around 3-4 years ago -it wasa dream destination for college hires. This is no longer the case.

I think the quality of people getting into an organization is a very good indicator of its future.In the last couple of years, no top CS student in India would headto Microsoft IDC even at gunpoint.Every year they come to campuses with a big fuss only to get the B&C grade students who couldn't make it to Google Amazon Yahoo - or top jobs in finance and Consulting . Oh yeah, in a way its been great to have the MS 'bigger must be better' philosophy. The final job offer list for Computer Science students(even in random no name universities) looks so much better with the comforting knowledge that anyone with >100 IQ is entitled to at least a Microsoft on their resume.

This is not the moment to giving each other high fives. Sure the company dodged a bullet but whats next? Where's the growth strategy??? Whats the plan to differentiate and win against Google, and others?

We've wasted too much time and energy chasing something that just shouldn't matter.

An earlier poster wondered if we were afraid to face Google. Forget facing Google, let's turn our back on them, drop our trousers, and show them our hairy buttocks ... that's how much we should care about Google.

In a world of Software PLUS Services, let's never forget that the desktop (the SOFTWARE) comes first.

The logical next step, and one that would give MS a lot of leverage due to our customer base, is merger talks with my current company. Not that these did not happen earlier, mind you, but maybe SteveB will try again.

After reading this blog for some time however, I do not think that would be such a great move from our employees' perspective. And I would foresee a massive brain drain in case it should materialise.

I will keep my eyes peeled and my resume in top shape, just in case...

So help me out. Where's the growth in Software and Services tied to the desktop? Sure sounds like retention to me.

Sadly, the logical step would be to merge with a company that provides services in the backend... such as my company (as stated earlier). We already have joint projects for Desktop-Backend-Integration via services ("Mendocino" anyone???)

I get that almost everyone is jumping up and down because SteveB walked away from shelling out $44B for Y! which was definitely not worth that much. However, folks seem to be forgetting the reason the bid was there in the first place: MS cannot compete with Google in the search space and is losing tons of money in the process.

So where does this put MS: back to square one -- sinking tons of useless $ into the online business.

Of course, now this means we return to where we left off... the slow fade into a less important icon of the boxed software business of decades past. It's kind of sad, but at least we can cash in and run at a respectable stock price! :-)

>>Anyone who's working on Windows 7 (myself included) knows that with the right management in place Microsoft can do amazing things.

The Windows 7 management team released Vista SP 1 and XP SP 3. Both were recalled due to execution problems. Vista SP 1 has failed to address the issues people complain about. Does this management team need another chance?

Is there anything about Microsot right now that doesn't require flat out denial of the world around you?

I find it hilarious that you're praising leadership for not going through with a stupid idea they originally wanted to do.

It's even more entertaining that Microsoft culture thinking has such low expectations and standards. You people feel so enriched after the most meaningless of things, it's like you're developmentally challenged.

Now that you've learned not to claw at your own eyes:Colouring in the lines, breathing, peekaboo and after many years of study:

Now that this deal is on the back burner (not off the stove, it makes too much business sense and management has demonstrated absolute obliviousness to cultural disasters).. Management can now focus on more important topics, such as:What do do with dying brands with no real growth future: Windows and Office....Infighting between dev, test, and PMs about who is needed, and who is a waste...Inability to grow in future areas: MSN, Live, Dead, on line collaboration...How to fix a marketing problem, ala DEC, which would not market free gold...

.. and last ..

Until the employees get behind the company, the company will go nowhere.

In the real world, clearly they do. It was the employees that screwed up, and the employees are the ones that shouldnt be given another chance.

In the fantasy world, however, you are right, management should be fired. But again in the fantasy world, I also expect Steve to wake up one morning and look himself in the mirror and say "Starting today I am going to spend more time with my family".

>XBox is our ONE remaining brand brightspot for the next generation. We have a narrow window to capitalize on it and fix things.

OP: Wow, don't get me started. . . whoops, too late.

Using your argument (ignoring the part where you forgot to mention that Apple and PC's are not exactly compatible as Apple uses EFI in lieu of Bios.) `Apple and Jobs succeeds, therefore copy Apple and Jobs and Microsoft will succeed' is a sorry example of Microsoft culture at its best.

Especially since everyone knows the XBOX profit history, the nature of its obsolescence (yeah, you used the same philosophy to copy Apple the first time implementing the PowerPC chip just before Apple moved to Intel--smart move heh). So is this a Pied Piper scenario repeat from 1281(the adults hate Microsoft so let's steal their kids)? What are you going to do when the kids grow up and realize that they have been robbed and can't play their games any more unless they buy another XBOX?

No, the strategic mess permeates the whole company and its strategy (quote Steve Balmer this morning on WSJ: "We like our strategy. We don't like our position." I have never seen so many stupid management decisions congregated in one company. Astonishing.

>>>"Now would be a GREAT time to focus on compilers. I don't know if you've noticed, but next year people will routinely run 8 core machines on their desktops, and compilers/libraries that could transparently and efficiently use that hardware are nowhere to be found."

While quality of hiring at Microsoft India IDC may be bad, the new hires in MS SMSG India is even worse. The interview process does not even exist, exit interviews dont exist, people get into jobs that are way above their abilities or interest and we have Neelam Dhawan to inspire people to join Microsoft.

I'm a business owner and a long-time Microsoft user and developer. I'm trying to think back to the last time I spent money purchasing desktop software for my business. I honestly can't. It's probably been a few years. I'm never touching Vista. I'm never upgrading to Office 2007. I have a free copy of Visual Studio 2008, but I didn't pay for it and I never use it.

If Microsoft can't find some desktop software to sell me, and it can't provide compelling online services, then what is its reason to exist?

what is that team in ms that has been working on next gen compilers or the last 4 or is it 5 years now? I saw some announcement a while ago of a project that was a collaboration betwen msr and vc++ folks, but i havent seen anything recently. maybe it is cancelled?

The usual argument about Mac OS X is that it works because Apple started from "scratch" (e.g. ported NextStep), cleaning out the cruft, and building from a modern foundation. They were able to do this because their market footprint was so tiny (way tinier than it is today). Therefore (the usual argument goes) their OS success cannot be reproduced by Microsoft, since Microsoft has a vastly bigger install base worldwide and is far more dependent on legacy compatibility.

Fine. But what this argument ignores is the fact that Apple TOOK CARE OF its legacy dependencies during the interim. This was a two-tier solution: 1) They created an OS 9 emulation layer called "Classic" (with windowing integrated with OS X) which provided about 80%-90% compatibility (you couldn't run media apps, but other stuff worked fine), and, more important, they created something called "carbon compatibility," which allowed Microsoft, Adobe etc. to port their existing apps to run natively on OS X with minimal code changes. They did this by (according to them) collecting ALL the legacy APIs, dividing them into groups, and figuring out which could be mapped cleanly to OS X, which couldn't (and had to be jettisoned by developers), and which had to be re-written. So, "carbon compatible" apps like Photoshop could run in OS X and OS 9 from the same codebase.

So, the obvious question: why can't Microsoft put together a relatively small team, build a new, modern, clean, small OS from scratch, and work the legacy APIs in, using the same kind of design philosophy?

At this point the question is, where are the real obstacles? Are they technical, or are they organizational and systemic? The sense I get is that a plan like I'm outlining here (which is obviously somewhat utopian and idealistic) wouldn't work and couldn't be done because of the way the COMPANY is built, not because of the way the OS is built.

There are too many well financed, faster companies out there with innovative people that wake up every day with a mission disintermediate the desktop.

Alot of money is betting that desktop will not be first in 2012.

Given MSFT's market share leadership on the desktop, there's only one way to go. Thinking you can increase average revenue per customer with services is just niave. The real question to ask is how low will MSFT desktop market share go?

You've got to credit Ballmer with the attempt to enable growth in other areas by acquiring Yahoo. But what's Plan B?

Balmer fakes a hand off to Windows Live in a scrimmage on the first down, starts a drive down the middle making all kinds of noise about the poor Yahoo stockholders, and then, on the fourth down, throws a hail Mary pass to the Yahoo Board at $22/share.

Then, come to work on the following Monday morning to find the BOD's pink slip finally.

Given MSFT's market share leadership on the desktop, there's only one way to go. Thinking you can increase average revenue per customer with services is just niave.

Why? Because you said so? I'll bet that you're wrong. Right now, the biggest threat to marketshare for Windows is OSX. Another expensive as hell OS.

Cloud services are very important. I opine on that importance all the time here to folks who dont get it. But that doesnt mean, as many of the equally clueless maintain, that "the desktop" is dead.

WHEN will people learn that "all up" predictions make you look like a moron and leave you eventually making excuses?

A good desktop experience enhanced by compelling cloud based services is exactly where computing is most likely to head. You say its "naive" to increase revenue based on services?

Many would have said it was "naive" to think people would be "suckered" into having ADVERTISING "forced" on them in this new uber power to the people "internet thing" because people HATE ads and go to this new Utopia to ESCAPE "evil corporate influences"

Funny... it seems that GOOGLE didnt get that memo and makes PILES and PILES by suckering people into consuming ads all while further snow jobbing them into feeling good about it (we do no evil! is their friggin corporate motto! how BALLSY is that!?) and making them really believe it is a "free ride"

The same people who rail day and night about the "evils" of a consumer society will tell you "Google gives away GREAT stuff and, well, its just "someone else" who is paying for it so thats good!"

Suddenly these agent mulders have become sheep from a little Google magic.

Make no mistake... There are PLENTY of ways to "build incremental revenue" by providing services. The key is to find a clever way to do it that people thank you for like the bloodsuckers at Google :)

If Microsoft can't find some desktop software to sell me, and it can't provide compelling online services, then what is its reason to exist?

To sell these things to other people who havent yet gotten the news that you represent the entire human race and they'd better fall in line.

You say you "never buy desktop software" and you state it militantly! Sir! Yes Sir!

So in that case stay tuned for the cloud offerings MSFT will be releasing. You'd be interested in at least having a look right? I mean you're just a cutting edge futurist who is at the forefront of a wave, you're not just an ideologue ranting on a blog right?

At some point, MSFT will have a cloud services story completed and, I would assume, folks who are GENUINE will actually take a look.

Of course the bullshit artist ideologues that typicall post on forums will keep their faux personas going by saying "MY BUSINESS WILL *NEVER* USE AN MSFT CLOUD SERVICE!" (but its ok, because their "business" is them in a room)

Today I speak with MANY MANY *MANY* organizations who still buy PLENTY of desktop software... And not JUST from MSFT, btw!

Apple also sells PLENTY of desktop software. Last I checked their nice little freebie bundles are helping move a lot of Macs and they arent floating out of a cloud.

What a stupid and pointless thing it is to argue this crap at the extremes with extremists on a blog... And yet I cant stop! argh!

I guess this is a big win for Microsoft. It can now spend less cash on its next set of second-class web sites.

The fact remains that it will still lag behind Yahoo and Google as a web starting point and destination. If you want to know why this is, pull out a stopwatch and go to moneycentral.msn.com. Time how long it takes for that web page to load. Now go to finance.yahoo.com with your stopwatch and time how long that site takes to load.

Get it now? If they haven't figured out how to make quick, responsive web pages on their own in the last 13 years, chances are they won't in the near future. It would serve the company better to buy somebody who has already done it, even at a premium. It's absolutely crucial for this company to remain competitive on the web.

Jared

P.S. For the record, I do think moneycentral.msn.com has the best contributors. It just pains me that I have to wait so long for Bill Fleckenstein's articles to load each week. What a waste of my precious time.

I think Yahoo! was so averse to this because they just don't trust MS when it comes to the web. And you can't really blame them can you. MS isn't really putting a position of strength front and center when it has execs like Yusuf Mehdi speaking about the deal on behalf of MS: http://searchengineland.com/080201-123411.php If you were Yahoo what message would that send? Oh boy this guy who has done nothing substantial with MSN is going to be our shining path forward? It's not that Yahoo hates MS is just that they think MS is incompetent and you can't blame them.

Yahoo! has a Firefox add-on called YSlow. It's their own tool to measure page load performance. If you're willing to run FF and add YSlow you can take a look at their results.

Summary: YSlow gives both finance.yahoo.com and moneycentral.msn.com a grade of F for page load perf. Yes, Yahoo! gets an F according to its own grading scheme. The Microsoft site is given a slightly lower F for various reasons. It actually has fewer HTTP requests and smaller total file sizes than Yahoo!, though. For primed or unprimed browser caches.

I never thought I'd be defending MSN but I'm calling foul on the claims that their perf sucks compared w/ Y!.

Google news does load a lot faster than MSNBC. The anon poster after Jared is totally right about that.

Oh darn. As someone who wants to see Microsoft die -- or at least turn into a smaller, better-behaved company -- I was hoping it would buy Yahoo. I think Microsoft is doomed in the long term, no matter what happens, but the Yahoo deal would have spead the process up by several years.

But maybe, like some are saying, the walk-away is just a negotiating trick, and next month Microsoft is going to go ahead with a hostile takeover. So I can still hope.

The only bright side of acquiring YAHOO is to kick some lazy/incompetent asses in MSN division.

I hope those asses, from SVP and corp., will still be kicked without a YAHOO deal.

Look at the recent hires, what a shame. Some guys who had been contracting with Microsoft for 10 years recently got hired. They failed interviews more than 100 times and I just could not understand how they could suddenly pass the interview.

Shame, shame, shame !!!

70% people moving to the Ad center are for a quick promotion. Nobody cares work.

Huh? We're lucky Yang is YHOO's CEO. Otherwise this deal would have been concluded, and for more than even the already financially-retarded original offer. It still might be if YHOO's shareholders manage to toss their leadership and BOD in the aftermath of this development.

All Ballmer did was make it clear that MSFT's organic strategy to catch up to GOOG (necessitated in part because he missed the initial opportunity completely) is a failure despite $10B's spent and years invested. He's also left a big question mark about how he could have misjudged this situation so badly and what similarly risky and expensive acquisition lies ahead since Online still faces the same challenges.

"MSFTexterememakeover, I hope you are reading this comment here. On your own blog you filter out all the comments and analysis going against your own."

Wrong. The only posts I routinely filter on my blog are those from the more rabid ABMers that contain no redeeming insight. Most are aware of my policy in that regard and have either moved on, or respect it when posting to my site. That leaves you and your rare offerings, and those seldom make it through because you've shown yourself to be incapable of civil or mature debate.

while most people on this sblog, inluding mini, rejoice at ms walking away, i think it is a bad thing for microsoft. they dont have the time on their side, another 5 billion could have made things more interesting.

it is clear that this will do as much damage (or more) to microsoft as it will to yahoo. the only company that stands to gain is google.

Lots of people criticizing Yang and Yahoo for blundering on this deal, but I don't see it.

From a purely financial point of view, Yahoo is a smaller tech company with a more volatile stock price... things aren't looking great for them now but they may turn around a bit, have a few good quarters, and the price could easily go back up to 40, where it was just 2 years ago.

If they traded their company for Microsoft stock, though, that's almost a guarantee of no upside. Microsoft stock has basically done nothing for the better part of a decade and I don't see a reason why that would change in the next decade.

From a non-financial standpoint, selling out to Microsoft wouldruin the spirit of Yahoo. Yahoo basically does all the same stuff as MSN but on a different platform and with different customers. Any way you look at it, trying to combine the two means much pain for everyone involved. Why would a company's CEO or its board want that to happen?

The hiring standards of MS India are pretty much known by now. I am now observing something much ,much worse at Redmond. The students from India being recruited here after their MSCS ( from American Universities ) are mostly those who've done their undergrad from extremely suspicious / bottom ranked Computer Science programs back at home ,and have some prior work ex at not-so-good IT Services companies ,and then managed to pay their way for a Masters from a US University. Many of us have often wondered how these students got admission for a Masters in the first place. That can still be understood because when someone applies from halfway across the planet (and you haven't interacted with him/her face-to-face) its somewhat difficult to understand how good or bad the candidate is.What I do not understand is how MS Redmond manages to hire these people (literally in THOUSANDS ) - even after so many rounds of extensive face to face interviews ?

Most of these ppl never made it to MS India in the first place. (You have to be pretty bad for that. )

Good CS Students from India would

a) Either do an MS+PhD from a good university and go into research.b) If they aren't very academically inclined they'll get a god job immediately after their Undergrad.

They generally don't just do a Masters ( unless its a very, very good CS program ).

Not that it affects me, but I'm just curious to know why all these people are being hoarded .

For the last 17 years, I've worked for 6 tech companies. So far, test teams in Microsoft are absolutely the worst.

Microsoft insists a ridiculous 1 to 1 ratio between dev and test. Testers are so dumb that whenever they're giving out any work estimate, they have to wait until devs give the estimate first and then simply multiple dev's estimate by 2.

This is not a joke any more. Instead, this is a real-life fxxxing disaster.

Go check YAHOO, APPLE, IBM, CSCO, DELL, GOOGLE, SUN, ORACLE. They have 5 to 1 ratio between dev and test and their products are tested much BETTER!

Microsoft' test automation can blow customers aways from the other end of universe. They are so bad that 10,000 automated test cases running for a week can not catch a single bug while a high school graduate can catch 100 serious bugs in a day for the same product.

With Yahoo, Microsoft can at least fire all testers and replace them with Yahoo testers.

I have to admit that Microsoft is probably one of few companies that make diversity a company-wide policy.

But if people who don't follow the policy don't get punished, the policy is useless.

SteveB, run some HR reports to see how many teams have 90%+ Indians. I can assure you that number is amazing.

Once the VP is replaced by an Indian, all GMs will be replaced by Indians within the next 6 months.

Once the GM is replaced by an Indian, all directors/managers will be replaced by Indians within the next 6 months.

Once a manager is replaced by an Indian, all leads will be replaced by Indians within the next 6 months.

Look at MBS. How many teams have 90% PM/DEV/Test managers?

I am the only person who is not an Indian in the 50+ people meeting every week.

Maybe I should learn how to speak Hindi, which is the only language they speak now ...............................................................................................................................................

SteveB, run some HR reports to see how many teams have 90%+ Indians. I can assure you that number is amazing.

I wonder how it compares to the number of teams that are 90%+ white, or 90%+ male.

I am a white male and am troubled by some of the behavior I've seen from groups of Indians at Microsoft but, as with pretty much any issue that deals with race or culture, it will be hard to handle in a fair way. Certainly the white males at Microsoft cause most of the big mistakes that the company makes.

I suppose what we should hope for is that teams and groups are evaluated in a fair and objective way at some point in the chain, so if a hypothetical group of Indians is underperforming, the group will be disbanded and everybody will have to go through more legitimate interviews to get on different groups. And of course if a group of Indians is kicking ass they should be rewarded accordingly.

"So, the obvious question: why can't Microsoft put together a relatively small team, build a new, modern, clean, small OS from scratch, and work the legacy APIs in, using the same kind of design philosophy?"

But they already did that, it was called NT...

You really need a clean slate to move forward, just rehashing good old windows won't work, as seen with Windows Me2, a.k.a. Vista...

"So, the obvious question: why can't Microsoft put together a relatively small team, build a new, modern, clean, small OS from scratch, and work the legacy APIs in, using the same kind of design philosophy?"

But they already did that, it was called NT...

So do it again.

Isn't it obvious that this is the only way to maintain OS relevance over a span of decades? The fundamental priorities of operating systems migrate and evolve, following "megatrends" in chip design, programming philosophy and what users want from and do with their machines.

I used OS X as my example (I'm the OP). Look at how Internet connectivity, GPU leverage, PDF and QuickTime are fundamental, deep components of the OS. Each of these was an add-on, an "outrigger component" is OS 9, which was unavoidable. The only way to achieve this is to start from "scratch." There's no way Mac System 7 could be retrofitted to base every screen draw on a vector-based GPU pipe or make QuickTime movies play in a dock because none of that stuff existed when the core OS was designed.

Look how automobiles evolved. In the late 'seventies, the transverse engine/front wheel drive configuration was introduced. Everybody making chassis had to re-engineer. A product like Vista is like an old front-engine/rear-wheel-drive car with an added second axle that brings the drive train back up to the front wheels.

You can't retrofit forever. You need a clean slate every ten years or so. You can either let some other company do it, or you can do it yourself, but isn't it obvious that this is the only way to keep abreast of contemporary technology?

While walking away to save 47.5B is a wise thing to do, look at our very anemic stock price one definitely doesn't feel rosy. While market seriously punish yahoo as expected, it doesn't reward us either. Basically two losers get punished, one before, one after the proposed deal. With the current incompetent management in place, I don't have too much confidence on company in general, or the 47.5B they saved two days ago, likely it will be wasted in an even dumber way next time.

... and once all the dev positions have been filled with Indians, all the distribution lists even vaguely related to the topic are filled with posts like "how do I {insert elementary task here}".

Before you go bashing Indians too much, let's have a sample of some posts from true blue Americans:

1) Principle SDE whining about whether he should wait to make a hardware purchase in case he can save 10 dollars from newegg's next sale when building a machine for wifey. (granted, I have not seen the wife)

2) Any number of posts, on almost any DL, about how unjust handicapped parking tickets are.

3) Last minute tax filing questions. Worse yet, the answers from people pretending to be accountants.

In summary, the company is full of helpless babies, from all over the world.

I may be in the minority here, but I have mixed emotions about the deal going bust.

As I spend more and more time struggling to get Live Mail to work consistently, Messenger to stop locking up, and Spaces to become relevant to the growing legions of semi-pro Bloggers, I was looking forward to getting new technical blood in that maybe would make us more accountable to our customers even when we give the software away for free.

Never before in the 10+ years with this company have I loaded a competing product on my home machines, but I did: Mozilla, because IE can't connect to a WiFi network reliably.

It's been 12 years since I used a non-Microsoft OS (OS/2), but I'm yearning for XP because I lose hours every week due to lock ups, resource hogging and a variety of other maladies that I'm sure are Vista and/or Office 2007 related.

Bottom line: I'm glad Ballmer & Co. had the stones to walk away from Yang's bold and stupid insistence for more money. But let's not let that take away from the fact that the executives don't have confidence in our ability to advance from within, at least not with the current products and resources we have.

Footnote to Steve Balmer: put your house in order before you try this again. I think the poster quoted a few start points, but I am sure there are areas in need of repair and improvement in virtually every business at Microsoft. It is probably not your IC talent, and more probably incompetent management.

And a footnote for all of you who think Balmer walked because of price: Remember this was a hostile takeover attempt from day one, but one that never obtained the formal title. Yahoo and Yahoo customers would rather gouge their eyes out than be managed by the likes of MSN, Live and aQ. You guys have had a decade to get it right and it justs keeps getting wronger and wronger.

Additionally, I think the Yahoo stockholders who will throw out Yang is an overblown and over rated media hype story. It won't happen.

IE has nothing to do with wifi. Firefox is a great browser, no question there, but it won't improve your wifi connection.

>> Never before in the 10+ years with this company

With your rather obvious lack technical skill, I'm amazed you stuck around that long.

>> have I loaded a competing product on my home machines

And that's a sad part about a lot of Microsofties. They don't see what's out there. They're almost afraid to install other products and operating systems at the risk of appearing less loyal. As a result, many of them think Microsoft has the best products, and it's sad, because in a lot of cases we do not. There are lessons to be learned from others, and a lot of folks are unwilling and unable to learn because of their hubris and/or laziness and/or stupidity.

Not that it affects me, but I'm just curious to know why all these people are being hoarded .

I could make snide remarks about the quality of American BS and MS programs, but that is besides the point.

The simple answer is that there are too many products and teams with marginal utility while the supply of smart people in America is finite. With 48,000 US employees, MSFT has to hire 3-5000 people every year just to keep up with attrition.

Thus hiring managers are so far down the list of smart people now that they are scraping the bottom of the barrel. And given two dumb people some managers are tempted to fill positions by plumping for someone with better qualifications.

>a lot of folks are unwilling and unable to learn because of their hubris and/or laziness and/or stupidity.

This discussion seems to reverberate year after year on Mini. Manager vs IC vs competence vs incompetence.

The bottom line is if you have no accurate focus, you have no precise direction. If you have no innovative or creative leaders, you have no innovative or creative results. If you step on a young innovative IC instead of train him or her, you end up with a disgruntled and unhappy IC.

If your top leaders have a constrained and unfocused vision, all hell breaks loose down the ranks, as the electrons have nothing to do but bump into each other.

Why your managers don't have a solid system for demanding excellence and innovation from their efforts is a management problem--probably across the boards. Anyway you guys get what I am saying.

No I do not work at Microsoft nor have I in the past, and my comments come by observing the results of what you do and are not intended to dis any particular individual.

Being a hiring manager in Development at Microsoft, I cannot accept that people think that our job is easy. First, you need to write up some insanely interesting position description to make people consider Microsoft and your team, instead of some other place where no real work needs to be done. After that, you have to waste considerable time in informational meetings with some people that wouldn’t meet the bar at McDonald’s, and yet want to be developers at Microsoft. I still wonder what HR does at Microsoft, since they won’t find any good candidates, won’t filter out the bad ones, and then won’t help you in the hiring process at all. No wonder a lot of good candidates are nowadays demanding “informational interviews”, what I won’t accept (if you take away any pressure of the interview process, you give to those candidates an unfair advantage).Finally, when I once found a good candidate that had a better offer from Amazon, which we couldn’t match, and who would accept our offer if only we could provide him the same signing bonus that Amazon offered, our HR simply refused to match the signing bonus. I understand we could not have given a college grad a salary above other more senior people and add to the compression and inversion that already plagues the company. But not even matching a signing bonus?!! How can one hire the best in the market if, when you find one, you cannot make a reasonable offer? Meanwhile, we see all these “Principals” and “Partners” coming out of nowhere and doing nothing for absurd salaries…

>>Now get down to do what Microsoft once did best. Produce kick ass Software...<<

Without sounding snarky, I'd like to know when this long gone era existed.

I think a very strong argument can be made that Microsoft is making much better software today than they ever did in the past. Office doesn't crash anymore, Windows doesn't crash anymore, SQL Server is highly scalable, .Net kicks the crap out of MFC, WCF takes a dump all over COM/DCOM...I think you get the picture.

>I think a very strong argument can be made that Microsoft is making much better software today than they ever did in the past.

As an outsider I tend to agree with that statement. Imagine having Vista (working well on 1995 hardware) before all of your customers became habitually trained in the way of Windows 95.

But my view is that while your products may work better (this is definitely not true for MSN, Live, ad development XBox, and general customer satisfaction, and can be said for aspects of Vista), Microsoft products (i.e., your bread and butter operating systems) have had their difficulty linked to expanding and forced functionality beyond what customers may have asked for. This was done in order to increase profits and to extend the reach of functional areas of the software taking over third party profit centers.

Perhaps Windows 7 will recapture a basic customer need for the operating system to be invisible by being primarily functional and useful instead of shouting and being in the way of your customer's needs. Linus Torvalds has made the statements about the invisible operating system many times and he is right.

The idea of increasing functionality was a strategic decision by your management many years ago to enhance and increase OS functionality (therefore ramping up the number of lines of code to obscene and dysfunctional sizes). The formula went on for so many years it became ingrained in the corporate development strategy and culture to the loss of customer functional utility.

It is a thousand times harder to keep something simple and easy when everything you know tells you to make it complex and overwork it. If you learn anything from Apple by example it would be this.

I think a very strong argument can be made that Microsoft is making much better software today than they ever did in the past.

I agree with the list you provided; MSFT's business software is as good as it's ever been (that's not sarcasm). In fact I just switched primary dev box to Windows Server 2008 and have been pleasantly impressed with how fast install was, how slick performance is, and how "easy" and user-friendly even installs on x64 are. Early days yet but somehow it "feels" better than Vista, and yes I know it's based on Vista SP1. In any case.

I think the people complaining about MSFT's software are focusing on two other issues, though:- throughout, the MSFT mania with software stacks: if you buy CRM, you must also buy SQL, BizTalk, etc.- the consumer side (Office apart), which generally is not so great; Live, Office Live, and so on ain't impressive and we have not seen much in the way of improvement. Even, say, Windows Live Mail looks like Outlook Express slightly warmed over, and still doesn't have a decent calendar or sync to web (at least, as far as I have discovered). When even Google is offering Outlook sync for free, what's the holdup? There's tons of opportunity. One example for which I would pay a monthly fee: family calendaring that just works, that's compatible with Outlook/Windows Live Mail/Windows Mobile, and that unites multiple family members on one view. Yahoo can't do this, Google has some of this but it's clunky, AirSet.com has some of this but it's clunky, and there's a huge opportunity (as far as I'm concerned, anyway) to offer a slick, family-centric service and eventually grow that into a worthwhile Google Apps competitor/cloud-based life manager. Ask anyone in the real world and they will tell you other "I wish my PC would..." stories. (I don't think Live Mesh would be one of them, though the remote desktop functionality is kind of cool and GoToMyPC needs a competitor.) I know MSFT has the talent to do this, and it'll cost a hell of a lot less than $44B. Bonuses for all! ;)

"Nope. IBM lost their business by making the mother of all fumbles, by allowing Microsoft to sell the OS that IBM paid for to other vendors."

I think that is a restatement of my point. IBM conceded the microcomputer industry (an industry, as you so capably point out, they created) to third-party vendors and Microsoft. That is what I meant when I said that Microsoft is conceding customers to alternative OS publishers. By conceding the "good enough" OS to other groups like BSD, or Linux, they are giving up territory that should be theirs through a less capable version of their latest version OSs. Unfortunately, they cripple their home versions so horribly that most users feel compelled to purchase the pro release, or keep the old version.

Sooner or later the other operating systems will be good enough that they will just abandon the home version for a fully functional alternative OS.

"MS made their fortune by catching IBM's fumble. Microsoft's fumble is happening right now, and the beneficiaries will be Apple and the Linux vendors (including IBM)."

I'm not sure what prompts the apparently xenophobic comments about Indians working at Microsoft. I work for a US Department of Energy laboratory and am quite used to working with colleagues from around the world. I would guess that one of the largest ethnic groups we hire or invite to post-doc at my lab are Chinese, but we also have many staff from India as well.

What that reflects to me is the strength of the education systems in both China and India. That they could send so many highly educated people to work abroad is a testament to their ability to push themselves into the 21st Century economy despite having an overwhelming number of citizens living in grinding poverty. In China alone there are a billion people who are living in abject poverty. That means only 300 million people, most of whom live within the eastern coastal provinces, are benefiting from China's growing financial power.

So while I can understand the concern that my fellow Americans have about foreigners taking what would at first blush appear to be American jobs, I instead feel compelled to ask why our country seems to produce so few scientists, mathematicians, and engineers with the relatively small number of people living in poverty?

I guess my point is, perhaps we shouldn't be angry with the Indians and Chinese for being so successful, but should instead ask ourselves why we have failed to do more with our abundant financial and educational resources.

>FROM BLOOMBERG.COM THIS AFTERNOON: Microsoft fell 16 cents to $29.08 at 4 p.m. New York time in trading on the Nasdaq Stock Market. The shares have dropped 18 percent this year amid concern that sales of Microsoft's Windows software, which runs more than 90 percent of the world's personal computers, are slowing and that buying Yahoo would prove expensive.

Now what was all that talk about the bump Microsoft would get and the drop Yahoo would see? Yahoo's drop is about fifteen percent above what the stock was trading at prior to the Microsoft offer in January.

And the board at Microsoft still retains Steve Balmer for what was that reason again? this really embarrassing, Microsoft.

And that's a sad part about a lot of Microsofties. They don't see what's out there. They're almost afraid to install other products and operating systems at the risk of appearing less loyal. As a result, many of them think Microsoft has the best products,

It is interesting that almost all the developers in Office have downloaded OpenOffice, tried it out, and have insightful things to say about it, and hardly any of the PMs have done the same. If you're in a meeting with PMs and start talking about how the competition does something a certain way, you will see a bunch of startled, confused expressions from across the table. Sad.

I really think Google should run sympathetic HR campaign to woo Indian engineers working for MSFT. After all folks on this blog don't think MS needs them and/or blames them for Yahoo / Online fiasco. Anyone from Google triumvirate listening?

The diversity of people and perspectives at Microsoft is what makes it such a great company. How else can we develop and market our products in over 165 countries to nearly 1 billion customers? Can't we all get along?

I guess my point is, perhaps we shouldn't be angry with the Indians and Chinese for being so successful, but should instead ask ourselves why we have failed to do more with our abundant financial and educational resources

One sensible comment in a bunch of insensitive, racist, and moronic comments...this is almost always the case wherever you go in the world. Exceptions exist of course but certainly not at Microsoft (as has been demonstrated by this blog).

This is really sad. Most people at Microsoft tend to call themselves progressive (whatever that means). Please stop this xenophobic racist nonsense. The last time I looked, I thought we were professional engineers and scientists.

For the last 17 years, I've worked for 6 tech companies. So far, test teams in Microsoft are absolutely the worst.

I spent 10 years with MSFT as an SDET. I can say I was lucky enough to work with teams that had built above average testing organizations. Testers were for the most part competent, found a lot of bugs, and we shipped good quality code (no security disasters and few bad bugs came back from customers).

In my current job (not MSFT) I recently interviewed candidates for an SDET position and ran into a lot of button pushers. But I must say the people from Microsoft were better than average.

It is always very risky to make generalizations about the quality of employees at Microsoft. It can vary wildly from team to team.

When it comes to testing, it is also hard to come up with metrics that adequately measure the productivity of a tester. You can't just count the number of bugs they file. I've met a few people that were quite apt at gaming the system (filing multiple bugs for the same issue while avoiding duplicate resolutions). Also, if a tester works well with the dev team they should be able to find most of the issues before the code is checked in and that leads to fewer bugs filed.

I don't dismiss other people's experiences and the (strong) possibility that there might be some pretty awful testers at MSFT, but I can tell you from experience that there are also teams that do testing right.

The problem with Microsoft is that there're so many STARS who only knows how to write long emails and send them out at mid-night !!!

They got promoted so fast that they would feel angry if it took 12 months for them to get a new promotion.

They know ZERO technology, they know ZERO management but they're the managers/leads.

90% of TEST LEADS in Microsoft should be FIRED immediately !!!

Give all test leads an interview, ask them to implement a stack. I can assure you that 90% of Test leads can't pass the interview although they claim testers must know how to write codes.

Give all PM leads an interview. Ask them to write a spec for keyboard, mouse or anything simple. Fire those idiots who can not write a one-page spec.

Give all Dev leads an interview. Ask them to draw an architecture diagram for Notepad. Fire those who don't know what the hell UML is!!!

Very accurate description. Managers is a group that has the largest percentage of incompetent people, according to my observation of several different business groups. Probably because most of them are technically incapable, they choose the road of "management". On the other hand almost all of them are very good at "people skill", which is synonyms for fiefdom-building and ass-kissing skill. In order to show they are doing "great" jobs, they create a lot of nonsense process and a lot of nonsense meetings which serve only one real purpose: to effectively eliminate valuable work time that should have been spending on writing high-quality code or doing good testing.Generally speaking, I only see less than 1/4 of the "stars" who are shining because they did a fantastic job.If we could get rid of all the incompetent managers and "stars", we will come out as a much stronger company, but the culture is very much rotten at this point...

Favorite Jerry quote: "We've always felt the Yahoo platform has been undervalued or underappreciated by the marketplace,"

After today's fall Yahoo is valued with forward PE of almost 60. 60! Those are Google valuations. I think the market is overvaluing this declining company.

I was excited about the aquisition, and the drama surrounding it. But the price was wayyyy to high from the get. If Ballmer does indeed try again, it should be after the shareholder lawsuits play out and the top engineers have finished taking advantage of the golden parachute Yang provided.

Microsoft is focusing its efforts in all the wrong places, The internet is a big thing, but Microsoft needs to focus on its OS and other top tier software packages. What makes MS products so important the their customers is that their products tend to just work. I am a big Fan of Linux, but even the easy distributions don't always just work. MS also needs to simplify it's sales strategy. How many versions of Vista are out there? Leave all the features of an OS intact and just have different licensing terms. i.e. a home licensed product is not to be used at corporations. How many people even use half the features? If MS wants a chunk of the net they need to integrate their software with the web more. Not go after Ad revenues, provide nice ways to say publish a blog from MSWord, or integrate an online slide show with powerpoint. Innovate with technology they have, not re-invent the wheel. Lastly develop with more technologies than just Microsoft, as OSes diversify Microsoft needs to look past being primarily an OS company to a software company that provides true cross platform applications. Write Middleware in C++ that can be ported to all OSes so that you can use say the .NET platform truly on all platforms. I know it can be a lot of work, but languages like C++ allow you to reuse large amounts of code from one platform to another. Think about how much server market share Microsoft could pickup if they wrote a middleware solution for full .net operability on linux, all those servers running linux could now use full .NET technology which is a nice language to program in.

I think you got it backward. Microsoft is declining, Yahoo is growing and expanding in the right areas. At least from my perspective. Yahoo's list of improvements and services added for me the customer over the last year or two are exactly what I as a customer appreciate. Microsoft on the other hand has built products and services over the last couple of years I do not want, never will want.

If you think you are right, why don't you spend your time, while waiting for your next failed opportunity to buy Yahoo, trying to make your own products in online services work and succeed?

Amazon is known for offering very high signing bonuses - the idea is that if you accept anything that's thrown at you until it vests, then you'll be rich just based on vested bonus. Doesn't make for a good working environment. Our signing bonus is more of a compensation for the cost of moving.

I'd like to try and get this these comments back on track with the subject "Microsoft walks on by - Yahoo!".

While I was also very happy that the deal was scuttled on Saturday, I do not think it is over. In fact, I'd guess that what is happening now is exactly was is intended...to wit, Yahoo's greed is backfiring, the shareholders are pissed (can't blame them), and Yang is rewriting history and saying he wanted a deal all along.

I would expect this will play out for a few weeks, the valuation of Yahoo will keep declining, and then we'll go back and offer slightly less.

I'd love to see Ballmer have the cojones to offer $24/share, like someone previously mentioned!

Once Yahoo shareholders finish boring Jerry Yang a new orifice, and their stock tanks again y'all will get Yahoo on the cheap. I think Monkey Boy is being quite shrewd about it. He wants Yahoo and he'll get it for considerably less than even the initial offer.

If he's not that shrewd, well then y'all have worse trouble than getting/not getting Yahoo.

Give all test leads an interview...Give all PM leads an interview...Give all Dev leads an interview....

While there's no shortage of bad leads at MSFT, you're barking at the wrong end of the dog. Firing bad Test Leads won't get rid of bad Test Managers. And firing bad Test Managers won't do anything about bad GMs. Same with Dev and PM orgs. If you fired all the bad leads, but left the incompetent Managers who hired them in place, the incompetent Managers would hire equally bad people to replace them. But...

If you fire the incompetent people at the top of the food chain, the incompetent people from the next rung will follow them out the door soon enough, and that will ripple down the org. You've got to start at the top. You can't fix a broken org from the bottom up.

I want to response to some people who were saying that Kevin Turner is being too tough on the field. As much I think Wal-mart is evil. KT is not doing enough!!!!!

If people out there knows that many sales account managers are manipulating their quota and making 200K to 300K in bonus for doing nothing - you would also say the same thing. The growth rate for last year wasn't 20% - it was much lower!

Dev and Test, you now know where the bonus money is going. Not in your or my pockets!

As I sat in the team meeting today, and listened to the pointless drivel of meaningless budgeting cycles, useless status reports of meetings that never really produce anything...I decided, wow, it's time to go.

I am a hard worker, but in the current culture and environment I have been conditioned to get by with about 10 hours a week. And I see the same conditioning all around me. I don't know how we actually make money with so many people sucking at the corporate teat.

One might ask, why would I want to leave. I could settle for mediocre reviews, just getting by, no advancement to speak of...but what I get in return. I get to go on vacation, but call it "working remotely" and save my vacation time. I can come in late, leave early, and pop over to ProClub in the middle of the day. I can work on my hobbies during the day, and still be able to hit the low expectations that the group has set for itself, and that the organization has come to accept year over year. So why would I want to leave?

Well, because I HATE IT!!!! I hate all these people walking around with a bloated sense of self importance, like they're curing cancer. I hate the people who talk like they think they know what they're doing, but don't. I'm sick of people with made up titles, directors with nothing to direct, empire building managers, cronyism and process for process sake. And even though I probably only work about 3 hours a day (and that includes con calls that I just listen in on), the whole culture depresses me and is poisonous to a productive society.

Run, run while you can. I am signing an offer with another company today, and will probably resign the day before I leave. Like anyone will miss a beat in their pretend kingdoms and status meetings. Goodbye Microsoft and hello REAL WORLD.

>"When you find yourself perpetually angered by little questions in your professional life, perhaps the problem is some bigger question you answered wrong earlier."-Gerald M. Weinberg, "Understanding the Professional Programmer" ISBN 0932633099

That reminds me of an old western concept of `when you find yourself in a hole, the first step to getting out is to stop digging.'

My point of course is what exactly is it that 75,000 people are directed to do that people want?

You might make a list and find that it only takes 10,000 to do the same thing, or you might evaluate the list and realize that 75000 are being supported by the work of the 10,000 and therefore need to be allowed to stand on their own to prove their value.

I am signing an offer with another company today, and will probably resign the day before I leave.

So what did you do to try to change the culture around you? Work the bare minimum according to you. Poor baby, everyone is incompetent except for you.

When you get out in the REAL WORLD, you'll discover there are companies even more dysfunctional than Microsoft. Take your attitude of blaming everyone around you for your problems and you'll be right back where you started.

I think you got it backward. Microsoft is declining, Yahoo is growing and expanding in the right areas...

If you're talking about stock price then you're correct. However, you can add all of the services you want or focus wherever you want but the truth lies one place and one place only: the numbers. Msft revenue and earnings numbers were simply impeccable this year. They haven't been this good since the late 90s. Why people choose to focus on whether we're doing a good job at competing against goog or not is beyond me. Focus on the numbers because they reflect reality.

I'll admit, the stock action this week is completely bizarre. What the market is thinking is well beyond anything that makes sense to me. If this deal still happens (I don't think it will) then it will happen at price that is no better than the original offer. But looking at today's declining price is frustrating. I think people are focusing on everything but the fundamentals. The fundamentals for msft are solid. Guidance for FY09 was even raised by a company that's notoriously over conservative. And they did it in an economy which is rather scary.

Reading a mail from our VP just now, it struck me that we employ more people whose job it is to extoll fancy PPTs with rah rah about Strategy! and Value! than developers who could, you know, get the job done.

As a dev, my job has changed over the years from designing, thinking and making smart choices to following an ever changing process. My productivity and motivation have tanked in step with those changes.

What has Ballmer done to this company's stock price? He's managed to bomb our stock and give yhoo a huge boost and nothing has changed. We're right back where we were 3 months ago but we lost 10 - 15% in our price while yhoo got a 30% increase.

How in the hell are we yet again stuck in this $27 - $30 hell range? We can't win. Was it not a guarantee that we'd see a bump in the stock once we walked away? Obviously not. The hatred for this company has to be 2nd to none...

Are people not fed up with his s**t? He continues to destroy shareholder value. Why are people putting up with this s**t? Seriously, does anyone have a good answer?

Disclaimer

These are sole individual personal points-of-view and the posts and comments by the participants in no way represent the official point-of-view of Microsoft or any other organization. This is a discussion to foster debate and by no means an enactment of policy-violation. These posts are provided "as-is" with no warranties and confer no rights. So chill. And think.